Asian stocks, dollar slide after Bernanke warning

HONG KONG 
Asian stock markets fell Tuesday after the Federal Reserve's chief warned the U.S. economy would continue to struggle and Japan unveiled billions in new stimulus spending to prevent a lurch back into recession.

Losses were modest across the region in line with a lackluster session on Wall Street. The dollar resumed its slide against the yen, euro and other currencies after climbing in recent days amid hopes the U.S. might stage a quicker-than-expected rebound.

On Monday, however, Fed Chairman Ben Bernanke said the world's largest economy was facing "formidable headwinds" - including a weak job market, cautious consumers and tight credit - that would limit the pace of recovery.

Bernanke also reaffirmed his pledge to keep interest rates at record lows for an "extended period," dousing expectations the Fed might hike rates sooner than thought after a jobs report last week showed the unemployment rate dropped to 10 percent.

In Asia, news that Japan was moving ahead with $81 billion in new stimulus spending did little to enthuse investors. The world's No. 2 economy grew for the second straight quarter in the July-September period, but falling prices have raised concerns about a cycle of deflation that could hinder the country's rebound.

The Nikkei 225 stock average fell 27.13 points, or 0.3 percent, to 10,140.47.